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DCMP486/2017
IN THE DISTRICT COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
MISCELLANEOUS PROCEEDINGS NO.486 OF 2017
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IN THE MATTER of the amount of US$95,650 and any and all interest accrued on those amounts transferred to and deposited in the bank account of ATL Power Systems Company Ltd (account number 043-472-92-30515-3) held at the Nanyang Commercial Bank Limited
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and
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IN THE MATTER of Order 15 rule 16 of the Rules of the District Court
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__________________________
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BETWEEN
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HUNTER AMENITIES INTERNATIONAL LTD. |
Plaintiff |
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and
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ATL POWER SYSTEMS COMPANY LTD. |
Defendant |
__________________________
Before: Deputy District Judge S.H. Lee in Chambers
Date of Hearing: 30 March 2017
Date of Judgment: 30 March 2017
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JUDGMENT
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1. By its originating summons filed 10 Feb 2017 (OS), the plaintiff sought from the defendant, inter alia, an order for the return of the sum of US$95,650 as money had and unjustly received by it at the expenses of the plaintiff.
2. The defendant had not acknowledged service and had not appeared at the hearing of the OS before me.
3. I am satisfied on the various affirmations of service before me that 1) the OS; 2) the supporting affirmations; 3) the notice of appointment to hear the OS; and 4) plaintiff’s skeleton, authorities and the hearing bundle had all been duly served on the defendant at its registered office.
4. The supporting affirmations I refer to in para 3 above are 1) 1st affidavit of Berny Amiel (Berny) filed 14 Feb 2017; 2) 1st affidavit of Lidia Polaski (Lidia) filed 14 Feb 2017; 3) 1st affidavit of Jacqueline Vaz (Jacqueline) filed 14 Feb 2017; and 4) 1st affirmation of Wong Tsz Kwan (Kwan) filed 24 March 2017.
5. Hence, I decided to proceed to hear the OS in the absence of the defendant.
6. Mr Erik Shum of counsel (Mr Shum) appeared for the plaintiff before me.
7. Having regard to the relief now sought in the notice of appointment, the affidavit evidence put before me and having heard Mr Shum, I agreed with Mr Shum that the OS could be disposed of summarily today as liability of the defendant to plaintiff’s claim has clearly been established: see O.28, r.4(1), the Rules of District Court, Cap.336H.
8. My reasons are as follows.
9. First, having carefully considered the affidavit evidence before me, including the documents exhibited thereto (in particular emails and bank records thereof), I am satisfied that the evidence of Berny, Lidia and Jacqueline are truthful and reliable. Not only are them not disputed, they are also inherently probable, consistent with one another and with the documents produced. I accept their evidence.
10. In addition, I also accept such records of defendant’s account No.043-472-92-30515-3 (the account) held with Nanyang Commercial Bank Limited (the bank) produced by Kwan as authentic and accurate record at the material times.
11. On the basis of the said affidavit evidence (including exhibits thereto) and records of the account I accept above, I find as follows.
12. The plaintiff is a company incorporated in Ontario, Canada and has carried on the business of manufacturing and distributing personal care products for use in hotels and spas across the world.
13. At the material times, Berny was plaintiff’s Chief Executive Officer, Lidia was its Chief Accountant, and Jacqueline was its Group Controller.
14. At about 1003 hours on 1 Feb 2017, Lidia received an email purportedly coming from Berny asking her to process an immediate international wire payment (1st mail). At about the same time, an identical email also purportedly from Berny was received by Tom Rudland (Tom), plaintiff’s Chief Financial Officer.
15. Believing that the 1st mail was made by Berny, Lidia replied by email at about 1010 hours listing out necessary information for processing the payment.
16. At about 1030 hours, Tom also sent an email to Lidia directing her to provide the necessary information needed for the payment. At about 1033 hours, Lidia forwarded the 1st mail to Tom.
17. At about 1036 hours, Lidia received another email also purportedly from Berny instructing her to transfer US$95,650 (the money) to Hong Kong and providing her with details of the beneficiary i.e. the account of the defendant held at the bank (2nd mail).
18. Believing that the 2nd mail was also from Berny, Lidia proceeded to set up the transfer via HSBCnet at about 1050 hours and presented a print-out of the transfer and of the 1st and 2nd mails to Jacqueline for approval. She further told Jacqueline that Tom knew of the transfer request and she also separately informed Tom that the transfer had been set up.
19. Having reviewed the print-out of the transfer and of the 1st and 2nd mails, Jacqueline approved the wire transfer at about 1100 hours believing that it was instructed by Berny.
20. At around the same time, Tom called Berny to enquire about the said transfer request. Berny denied he had anything to do with the request or the 1st and 2nd mails.
21. Tom called Jacqueline immediately to stop the said transfer but it was too late. Despite Jacqueline had contacted HSBC Bank Canada to terminate the transfer and recall the money, she was advised that the money had already been released and could not be recalled.
22. In fact, Berny never sent, or caused the sending of the 1st and 2nd mails. He did not own the email account managingd4@aol.co.uk concerned. He never requested or instructed the transfer of the money. Plaintiff had no dealing at all with the defendant. It was under no obligation to make any payment to defendant.
23. The 1st and 2nd mails were, I find, fraudulent and fictitious emails sent under Berny’s name when in fact they were not from him. Both Lidia and Jacqueline were so misled into arranging and approving the transfer of the money to the account. It was an email scam or an email fraud.
24. As a result of the said scam or fraud, after deduction of bank charges in the wire transfer, the money in the net sum of US$95,619.58 was credited by the bank to the account of the defendant at 0907 hours on 2 Feb 2017. Up to 20 Feb 2017, there were only deposits made to the account. In other words, no withdrawal of any sum, let alone the money, was made from the account. The money remained in the account up to 20 Feb 2017.
25. In the meantime, by a Mareva injunction obtained by plaintiff ex parte on 10 Feb 2017, the defendant was prohibited from disposing of its assets up to the value of the money in Hong Kong, in particular the money held at the account. The said order had been served on the bank and, on 20 Feb 2017, it was ordered to be continued until further order of the court.
26. On the basis of the above findings of facts, I agree with Mr Shum that the plaintiff has made good its only relief of money had and received sought in its notice of appointment.
27. The defendant had received the money from the plaintiff and had been enriched. Such enrichment had been at the expenses of the plaintiff. And such enrichment was, I think, unjust. The defendant was stranger to the plaintiff and it had nothing to do with the plaintiff. There was a total failure of consideration for the payment of the money. Had not for such mistaken belief of plaintiff’s staff caused by the email fraud, plaintiff would not have transferred the money to the account. It is therefore unjust for defendant to retain the money. And no applicable defence was shown before me.
28. In this connection, Mr Shum submitted that it does not matter whether the defendant was among the perpetrator(s) of the email fraud or not, so long its account was used to receive the proceeds of such fraud. If not perpetrator(s) of the email fraud, the defendant had, he submitted, allowed the account to be used to receive the proceeds of such fraud. For my analysis of the legal position in para 27 above, I agree that it is unnecessary for me to decide whether the defendant was among the perpetrator(s) of the email fraud or not. Its legal liability to return the money to the plaintiff has plainly been established at law on the evidence I accept.
Relief
29. Accordingly, I order that the sum of US$95,650 (or its Hong Kong dollar equivalent) held by the defendant with the Nanyang Commercial Bank Limited in account number 043-472-92-30515-3 be returned to the plaintiff as money had and unjustly received by the defendant.
30. I agree that the plaintiff should be compensated by way of interest for such period it was deprived of the money. Mr Shum asked for interest at judgment rate. I agree.
31. I further order that defendant should pay plaintiff interest on the said sum of US$95,650 (or its Hong Kong dollar equivalent) at judgment rate from 1 Feb 2017 to the date of its return to plaintiff pursuant to my order at para 29 above.
Costs
32. Mr Shum asked for costs of the action and submitted it is “appropriate” to award costs on an indemnity basis in the circumstances of this case. He drew my attention to the 2 Court of Appeal decisions in Choy Yee Chun v Bond Star Development Ltd [1997] 1 HKLRD 1327 and Pacific Electric Wire & Cable Co Ltd v Texan Management Ltd & others, CACV 90, 91, 93-96/2012, unreported, 11 Oct 2013.
33. This court, he submitted, can and should take into account the circumstances of fraud leading to this litigation and make such costs order to compensate the victim of such fraud i.e. plaintiff as fully as it can. I agree with him.
34. Therefore, I order that the costs of this action be paid by the defendant to the plaintiff on indemnity basis, to be taxed if not agreed.
35. Finally, it remains for me to thank Mr Shum for his assistance.
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(LEE Siu-ho)
Deputy District Judge
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Mr Erik Shum, instructed by Wilkinson & Grist, for the plaintiff
The defendant was not represented and did not appear
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